Airbus Boeing 23[1].

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Airbus Boeing 23[1].

  1. 1. Building Air Planes Globally
  2. 2. <ul><li>Global Aviation Manufacturers: Airbus(Europe) and Boeing (America) </li></ul><ul><li>Transfer of technical know-how in Asia by Airbus and Boeing, as they were losing out their expertise for next generation aircrafts. </li></ul><ul><li>70% of the Boeing 787 Dream-liner were built outside USA. </li></ul><ul><li>60% of the Airbus A350 production was done outside Europe. </li></ul><ul><li>Manufacturing race contributed to the battle of racism and corporate war. </li></ul><ul><li>Major beneficiaries of the outsourcing work was Asia, especially Japan and China. </li></ul>
  3. 3. <ul><li>Founded by William E.Boeing & George Conrad Westervelt on 15 th July 1916. </li></ul><ul><li>Became the largest aircraft manufacturer, HQ in Chicago, Illinois (US). </li></ul><ul><li>Initially named “B & W” then named to “Pacific Aero Products” and finally “Boeing Airplane Co.” </li></ul><ul><li>In 1927 a new airline service, BOEING AIRPLANE TRANSPORT ,later merged with its earlier company. </li></ul><ul><li>First aircraft – Boeing 314 Clipper in June 1938. </li></ul><ul><li>Manufactured B707 in 1958 -- US first commercial jet airliner. </li></ul><ul><li>Acquired Piasecki Helicopter in 1960. </li></ul><ul><li>Introduced a twin engine 737 in 1967 -- A short & medium range airliner. </li></ul>Contd.
  4. 4. <ul><li>Crisis : </li></ul><ul><li>a) In 1970, Apollo program was cancelled </li></ul><ul><li>b) In 1971, US Congress stopped financial support for development of Supersonic 2707. </li></ul><ul><li>c) Employee strength reduced from 80,000 to half in Seattle. </li></ul><ul><li>As passenger traffic increased, competition became tougher hence Boeing introduced new aircrafts-757,767,737,777. </li></ul><ul><li>In mid- 1990, introduced Next Generation 737 or 737NG. </li></ul><ul><li>Merged with Mc-Donnell Douglas in 1997 due to which MD-95 renamed to 717-200. </li></ul><ul><li>The Boeing 787 or the Dreamliner is under development and is scheduled to enter services in 2008. </li></ul>
  5. 5. <ul><li>Formerly known as Airbus Industry. </li></ul><ul><li>Jointly owned by EADS(80%) and BAE(20%). </li></ul><ul><li>In 1967, MOU signed among British, French & German govt. to develop A300(with 300 seating capacity). </li></ul><ul><li>In 1972, A300 touched the skies for the first time. </li></ul><ul><li>Launch of A320 in 1981 helped Airbus emerge as a major player in aircraft market, had over 400 orders before its launch. </li></ul><ul><li>In 2003, Airbus delivered more jet-powered airliner then Boeing for the first time in its 33 year history. </li></ul><ul><li>On April 27, 2005, the A380 successfully completed its first flight from Toulouse to France with seat capacity of 555 passengers & would be world’s largest commercial passenger jet. </li></ul>
  6. 6. Global Market Share In 2006 (Actual) By 2010 (Forecasted) Boeing 55% 51% Airbus 21% 31% Others (Bombardeir and Embraer) 24% 24%
  7. 7. <ul><li>Global Civil Aerospace Market </li></ul><ul><li>Boeing and Airbus dominated the large aircraft market (more than 100 seating capacity). </li></ul><ul><li>Embraer (Brazil) and Bombardier (Canada) dominated sub 100 market segment. </li></ul><ul><li>Major customers were national carriers providing both long haul and short haul services and low cost airlines. </li></ul><ul><li>US, Europe, Asia and Latin America were primary markets for aerospace industry. </li></ul><ul><li>Boeing had the largest market share in Asia (71%) and least in Europe (6%) </li></ul>
  8. 8. <ul><li>Boeing </li></ul><ul><li>In 1982, Boeing outsourced 15% of manufacturing process to Japan for developing Boeing 787. </li></ul><ul><li>In 2006, outsourced more than 35% for manufacturing Boeing 787 and Dreamliner. </li></ul><ul><li>Airbus </li></ul><ul><li>In march 2006 announced A320 production line in China - its first ever production facility outside Europe. </li></ul><ul><li>Super Jumbo A380 which was recently brought by Kinfisher Airlines to India was being built by non Europeans also. </li></ul>
  9. 9. <ul><li>Low labor cost and production cost (in China) helped companies to reduced manufacturing costs. </li></ul><ul><li>Acquiring parts and equipments from Japan and Canada helped to employ their expertise. </li></ul>
  10. 10. <ul><li>U.S enjoyed a close political relationship with Japan. </li></ul><ul><li>Boeing got 96% market share in commercial aircraft market of Japan. </li></ul><ul><li>Boeing also got subsidies from Japan. </li></ul><ul><li>Airbus set up manufacturing unit in China in order to prevent Boeing taking control over the market. </li></ul>
  11. 11. <ul><li>Boeing : Japan </li></ul><ul><li>Japanese government and industrial firm sought to establish Japan as an aerospace power. </li></ul><ul><li>Japan’s METI invested US$ 76 million to developing facility for aircraft. </li></ul><ul><li>Japanese aerospace manufacturing companies like MHI, KHI,FHI, JAL, ANA got contracts from Boeing 787 to manufacture the wings. </li></ul><ul><li>Carbon fiber instead of Aluminium was used in wings which increased fuel efficiency and Boeing revived their market position. </li></ul><ul><li>Airbus : China </li></ul><ul><li>China lagging behind Japan technological aspect of aircraft manufacturing. </li></ul><ul><li>Airbus outsourced its assembly work (less technical then wing design) to china. </li></ul><ul><li>Airbus announced its assembly site in China, its first ever outside Europe in 2005. </li></ul><ul><li>Airbus announced to invest $10 billion in China for 150 narrow body A320s. </li></ul><ul><li>It was a major push by Airbus to pull even with Boeing. </li></ul>
  12. 12. <ul><li>Asian aerospace giants could capitalize on outsourcing spree from giant players like Airbus and Boeing. </li></ul><ul><li>Close political and social ties to booming Asia Pacific market was certainly going to help. </li></ul><ul><li>China expected to become second largest aviation market in world after U.S. </li></ul>

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